Establishing local leadership and strong policy

Posted by Dr Hugh McDermott Mp on February 08, 2016

Seventy four years ago the eminent Professor FA Bland called for local government to be led by one of the "strongest" ministers. Forty years later the local government historian Frederick Larcombe condemned the "'stop-go' tactics by alternate politically opposed governments (which have) contributed greatly towards the present ineffectiveness of the local government system".

One of Bland's "strongest", new Premier Barry O'Farrell, has inherited the placement of that portfolio in his department and is responding to Sydney's planning morass. There have been many reports calling for this-or-that remedy to current issues, most especially the growing pressure to re-empower local government, hasten housing supply and strengthen infrastructure.

Local government legislation in Australia and especially NSW is "permissive" and "enabling". This means that councils can provide leadership and perform strongly if they wish to, subject to prudential and probity rules. The NSW Act 1993 requires councils to have but one employee as a minimum and adopt any structure. There are some penalties, no incentives, and a reliance on self-governance or improved behaviour through toothless codes. (That 10 councils were sacked between 2003 and 2008 alone is startling and will be explained later.)

However, the Sydney planning basin contains 62 councils and indeed the first reform is the call for council amalgamations, for example by the Sydney Business Chamber on two occasions, to reduce 41 councils to 10. The consulting engineers' association had 40 going down to 11. There are so many others of less specific nature in the press, including by federal ministers Albanese and formerly McKew.

The Chamber used the Department of Planning's sub-regional boundaries without analysis of operational or economic impacts and put Sutherland in with St George, the minnow swallowing the whale, the boundaries uneven in population content. The engineers developed their own boundaries (Sutherland standing alone) but with similar analyses – a general belief in loss of leadership and potential significant savings (to summarise). The last royal commission on this – 3 members, 3 different conclusions – was in 1945 and Stan Haviland's "eight cities" option was the most popular. All and every attempt failed largely due to Party and petty interests in local government itself. The councils' Associations made attempts to adopt district councils but were defeated by their members.

Greater Sydney was supposed to reverse the filching of "local" systems by state undemocratic instrumentalities, and there might have been significant economies then, 80 years or so ago. That idea had died by 1932 and even more so as the systems became corporatised or privatised beyond local government's purview.

The facts have been reported by the Australian Institute of Urban Studies (with the UNE's Centre for Local Government) in "Is Bigger Better?" – no; by Professor Percy Allan in "Secession" in 2001; and by the LGSA's Independent Public Inquiry (led by Allan). Big councils can provide a wider range of services, smaller ones distribute them better, and "virtual councils" can be very small but contract many services – bringing local communities closer to their taxation and service decision-making processes. The big savings are not there any more. However, many believe that planning approvals (as opposed to planning politics) are beyond the capacities of local representatives. The Local Government Association's Independent Inquiry found that less than one in ten residents supports the determination of development applications solely by councillors, and industry certainly agrees.

Given that there are planning advantages in co-ordinated councils, why would Sydney need 10 or 11 medium-sized councils when the advantage would lie in bringing transport, housing, public services, political processes, funding schemes and communities into integrated catchments – and there are not 10 of those? Brisbane and Auckland are more integrated. Future generations would see the 10 or 11 options as a missed opportunity.

On the other hand, the Cumberland County Council from 1945 was a "great experiment" in integrated planning but it had died by 1959, undermined by both local councils and developers. The same fate was suffered by other attempts to integrate governmental planning, in 1948, 1950 to '52, the 1960s, and on to the 2000s. As Sir Charles Cutler said in 1975, "Past experience indicates that it is very difficult to co-ordinate public bodies with traditional sovereignty in their own fields…. Representation has often been token …". Craig Knowles' attempt was killed by then transport minister Michael Costa.

We come to how well councils perform in their major functions. The second broad idea from the grass-is-greener camp is to do what English cities are doing, introduce popularly-elected full-term mayors with (a) leader and cabinet, or (b) elected mayor and cabinet structures, increasing political leadership and responsibility while reducing the appearance of managerialism. This is almost the City of Sydney model in reality (rather than law), and applies in Brisbane with modifications. Local politicians would prefer to regain sovereignty.

The NSW Local Government Act 1993 sought to establish "separation": politicians do the community leadership and set policy while managers do the probity, prudence and implementation. This is a modification of what Charles Rightor wrote of in 1919 regarding Dayton's (Ohio) famous experiment after a long period when, across America, candidates for mayor, commissioner of police, aldermen, council managers and dog catchers appeared on the same "long" ballot paper, one Party versus the other:

A city is a great business enterprise whose stockholders are the people… Our municipal affairs would be placed upon a strict business basis and directed, not by partisans, either Republican or Democrat, but by men who are skilled in business management and social science; who would treat our people's money as a trust fund, to be expended wisely and economically, without waste, and for the benefit of all citizens. Good men would take an interest in municipal government, and we should have more statesmen and few(er) politicians.

Again, history bites. The Barnett Committee recommended the introduction of Chief Executive Officers above the town clerk, in 1951, after about 40 years of calls for the same thing inspired by Dayton and others, for instance Sir Joseph Carruthers' in 1919 – give the people a chance to decide if they want to replace councils with commissions. That failed in Australia because our tradition is – fiercely – for local control BUT compare that with the spectacular failures of "aspirational" civic politics in various NSW cities and the multiple council sackings which inquiries have found are substantially due to poor councillor understanding and/or behaviour together with intimidated managers joining the aspirational campaigns.

There is a trend away from the American model in America as found in surveys by the Municipal Research and Services Center of Washington and others. There is English evidence that structure matters less than the quality of people. Our 1993 structure looks capable enough to improve rather than replace although the patches and crossings-out have made the Act a mess. 1993 was a job half done.

What is the real issue? One of the drafters of the 1993 Act was John Mant. He summarised progress since 1993 in a paper to the Sydney Business Chamber in November 2009, "Close to Home – reforming local government in NSW":

Major reform has not been forthcoming. Nobody has really wanted it – not the unions or the Ministers, nor, at least, until recently, the Local Government Associations and the Department of Local Government. With a couple of exceptions, most councils look the same and operate essentially in the same way as they did 100 years ago. The titles and the spin may have changed and the salaries have gone up, but the organisation is much the same.

Admittedly the training courses provided by the department and associations are very traditional; and planners have to live in a "toxic" council environment. Mant has pointed to the option of restoring something like the pre-1993 executive functions of mayors. Every person has to think that one through. The other view is that freeing councillors from piles of paper so they can focus on their own sense of initiative, the frightening frequency and intensity of climate events, population challenges and infrastructure gaps; and getting Australian councils in the same co-ordinated mindset as their English, American and other peers, are quite possible now. That is, policy and leadership, not management of operations.

Councils and the associations could focus on "missing bits", constitutional recognition or the implementation of municipal financing in a responsible manner, with excellent scenario-based planning, appraisals and plebiscite approvals. Both are important but which matters most right now? Can councils meet the challenges that are here now and the others heading their way?

In short it's not the structure of the 1993 Act that's amiss. We have to do better but not build another Titanic. What will work are clarity in accountability, incentives to those who perform better, and penalties to those who disappoint us and compromise the legacy we hand to our grandchildren. Those reforms are within a strong government's reach.